Malcolm Owen
Acquiring Peloton could be a "major strategic coup" for Apple, according to Wedbush, with the purchase potentially helping boost Apple's moves in the health and fitness market.
Following the halt of production of bikes and treadmills due to waning consumer interest, Peloton has reportedly become an acquisition target. While the main attention has been on Amazon's possible bid for the company, analysts have put forward the case that Apple could be interested in acquiring the firm.
In a note to investors seen by AppleInsider, Wedbush analysts Daniel Ives and John Katsingris write that Apple could easily be one of the potential acquirers of the fitness company. For Apple, "acquiring Peloton would be a major strategic coup and catalyze the company's aggressive health and fitness initiatives over the coming years," Wedbush says.
"With 2.8 million paid subscriptions today and a very strong/unique competitive moat, Apple acquiring Peloton would be both an offensive and defensive acquisition in our opinion."
On the defensive side, a purchase by Amazon or Nike would give either company a "major foothold into the living rooms of consumers globally," with massive potential for cross-selling services. To Apple, such a purchase would be "a business model risk for its healthcare segment and future endeavors."
As an offensive purchase, Apple could use its Fitness and Apple Watch strategy to "leverage the Peloton services and flywheel to significantly bulk up its healthcare initiatives," a field Apple has consistently worked on.
Wedbush highlights that Apple doesn't seem to be an obvious candidate for acquiring Peloton, as it has largely avoided major acquisitions outside of its $3.2 billion Beats purchase in 2014, but it's still possible. With an expected sale price of between $12 billion and $15 billion, this seems a high figure for Apple to willingly pay, though it does have over $200 billion in available cash resources.
"We believe Peloton is a unique asset that would fit well into Apple's golden consumer ecosystem which makes us believe Cupertino could be a real bidder for this asset," the analysts conclude. "Apple may be forced into this deal if Amazon, Nike, or potentially Disney aggressively goes after Peloton in a defensive blocking strategic move."
Wedbush currently has a $200 12-month price target for Apple, with the iPhone maker designated with an "Outperform" rating.
AppleInsider Staff
Chip Loder
Christine McKee
William Gallagher
Andrew Orr
36 Comments
What a low IQ moron. There is not an M&A deal he has not advocated - Netflix, Tesla, game publishers… It’s as if he still does not understand Apple even though he follows it everyday 🤔
Wedbush is trying to drive up the price of Peloton, I see.
I would consider an apple version of Peloton. If Peloton would enable apps like amazon prime, youtube, apple tv, netflix, hdhomerun, zwift. I would consider Peleton as well but they try to lock you into a monthly subscription; otherwise, you have a big paper weight or an expensive clothes hanger. Their current business model does not work for me. Apple can make that big display like a big ios device/apple tv with a fitness focus. I can see this fitting in Apple’s ecosystem, but Apple would probably prefer to make something on their own vs buying another company.